Automobile Insurance

Let’s discuss the different types of auto insurance. There is:

(1) Liability Insurance. Covers what you must pay if you cause bodily injury (to a person).

(2) Property Damage. This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. It usually also covers damage to telephone poles, buildings, fences etc.

(3) Medical coverage pays for the cost of treating injuries, sometimes lost wages and funeral expenses.

(4) Collision. Covers for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you’ll also be reimbursed for the deductible.

(5) Comprehensive . This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals. Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

Some states do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

(6) Uninsured and Under-insured Motorist Coverage. This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Under-insured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as pedestrian.

Remember each state has its minimum amount of coverage for each. Talk to your insurance representative about each item as you are purchasing insurance.